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Retail conglomerate Premier Investments has revealed a major profit bump but says it will keep JobKeeper benefits as a safety measure against future snap lockdowns.
The global retailer, which owns brands such as Peter Alexander, Just Jeans and Smiggle, posted a net profit after tax of $188.2m for the first six months of financial year 2021, an 88.9 per cent hike compared with its interim result last year.
Premier’s upward swing is off the back of surging sales across its retail portfolio, particularly from online orders during lockdowns.
The group also confirmed it would retain $15.6m in JobKeeper benefits received in the first tranche of the scheme, claiming the wage subsidy would be used to pay employee wages if further snap lockdowns occurred.
“Premier is committed to the $15.6m net benefit of JobKeeper 1 recognised in 1H21 being used to continue to pay its full-time and part-time workforce their contracted hours should they potentially be stood down and unable to work due to any further state government-mandated snap COVID-19 lockdowns,” the company said in a statement.
A growing number of public companies that booked profits during the pandemic have returned JobKeeper payments to the taxpayer.
This includes Super Retail Group, Dominos and Nick Scali.
Premier chairman Solomon Lew said the company’s financial success had come during a “very difficult and volatile environment”.
“Today’s announcement is a testament to the skills and dedication of our entire global team,” the Melbourne billionaire said.
Earnings before tax and interest (EBIT) were $237.8m, a 88.5 per cent increase on the previous corresponding period.
The company said the significantly higher EBIT margin was driven by online orders rather than its bricks and mortar store network.
Premier chief executive Mark McInnes said the sales rise was partly due to the group gearing its sales comeback on the Black Friday and Christmas trading season.
“In the midst of a global pandemic and despite the considerable uncertainty at the time, we made the critical decision in mid-2020 to invest in increased inventory for the key summer, Black Friday, Christmas and January sales period,” Mr McInnes said.
“This decision ensured we were in stock to deliver significantly higher sales and gross margin in 1H21.
“Those same inventory investment and in-stock strategies have continued into 2H21 and are providing a foundation for the sales and gross margin momentum we are currently experiencing.”
Global like-for-like sales grew 18.2 per cent over the period, with Peter Alexander sales up $62.9m, or 43.4 per cent, on last year’s interim results.
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